How we got the numbers

Pursuant to the Chief Financial Officers Act of
1990, as amended by the Federal Financial Management Act of 1994 (a
title of the Government Management Reform Act of 1994), the Inspector
General of each covered federal agency is required to audit and publish
the financial statements of their agency.

The largest agency, the Department of Defense, has
failed to comply with the requirement for audited financial statements
since the requirement went into effect in the mid-1990’s and has reported
significant unsupported adjustments to balance its books. In fiscal
1999, DOD reported $2.3 trillion of undocumentable adjustments to balance
its books. In fiscal 2000, DOD reported $1.1 trillion of undocumentable
adjustments to balance its books. For fiscal 2001, DOD declined to report
the amount of undocumentable adjustments used to balance its books.

The source of the $1.1 trillion undocumentable adjustments
to balance DOD’s books in FY 2000 used for the $1.1 Trillion Missing
Money calculator is from the Department of Defense Agency-Wide Financial
Statements Audit Opinion – A Memorandum for Under Secretary of Defense
(Comptroller), dated February 26, 2002 Re: Independent Auditor’s Report
on the Department of Defense Fiscal Year 2001 Agency-Wide Financial Statements
(Report No. D-2002-055) signed by David K. Steensma, Acting Assistant Inspector
General for Auditing.

Another agency which has experienced difficulties
in the financial area is the Department of Housing & Urban Development.
HUD runs the mortgage insurance operations of the Federal Housing Administration
as well as the securities operations of Ginnie Mae used to issue hundreds
of billions of mortgage securities using the full faith and credit of
the US government. HUD also has significant regulatory responsibilities
for the oversight of the US mortgage markets, including for the government
sponsored enterprises, Freddie Mac and Fannie Mae.

The source of the FY 1999 figure of $59 billion
is testimony by the HUD Inspector General, Susan Gaffney before the
House Subcommitte on Government Management, Information and Technology,
House Committee on Government Reform, March 22, 2000.

Comparative Costs

Head Start

The cost of a child in Head Start comes from the
Head Start Program Fact Sheet
issued by the US Department of Health and Human Services.
The average cost per child for 2002 of $6,934 was raised by 2%
to adjust for inflation to $7,073.

Children's Health Care

The figure of $2,333 per child insured under Medicare
is from the
National Priorities Project's analysis of the trade-offs
of military spending. The average cost of Medicaid
per child is based on the most recent figures available (1998)
and then adjusted for inflation by 10% a year (to compensate for
the faster rate of inflation in health care).

Four-Year College Scholarships

The College Board report
Trends in College Pricing
estimated that the cost of attending a four year
public college or university in 2002 was $9,963, or $38,652 for
four years. To this figure was added 2% to adjust for inflation,
or $39,425.

States Share:

The Internal Revenue Service 2001 IRS Data Book,
Publication 55B gives the amount of US$ of federal
taxes paid by each state
. The $1.1 Trillion Missing Money calculator calculates the pro-rata
state share of "undocumentable adjustments" by using the amount of Federal
taxes paid by each state in 2001 as a percentage of all IRS tax payments
paid by all US States for 2001.